Notes On The News

You Too Can Be A Midget on a Level Playing Field.

The Tory promise was a “level playing field” in which people could compete freely and win according to their merits. But unless you believe that Old Etonians with millionaire parents are vastly superior to the rest of us, that is not how it actually works. Imagine a “level playing field” where you are only six inches high. A lot of the other players are no larger, and some are smaller than you. But a few are normal human size, and some are giants. What chance would you have? The reality of Britain is that Global London is flourishing at the expense of the rest of Britain, including parts of London.

“London’s economy is doing even better after the banking crash than during the bubble – while nearly every other part of the UK has seen its economy shrink by comparison. Exclusive findings published by the Guardian show that London and the south-east are racing away from the rest of the UK at a pace that would have seemed almost incredible at the height of the financial panic. During the boom from 1997 to 2006, London and the south-east was responsible for 37% of the UK’s growth in output. Since the crash of 2007, however, their share has rocketed to 48%. Every other nation and region – with the exception of Scotland – has suffered relative decline over the same period. The upshot is about a quarter of the population is responsible for half of the UK’s growth, leaving the remaining three-quarters of Britons to share the rest…”

“In the decade to 2007, manufacturing and other ‘productive businesses’ took 9.7% of all bank loans. From 2008 to 2012, however, that plummeted to just 5.9%. That compares with the 40% of bank loans to other financial institutions and the 52% of credit extended to individuals, much of which would have been used for mortgages. Infrastructure projects such as the Olympics and the Channel tunnel rail link have seen a huge amount of public spending flowing into London. Last year, the construction skills industry training board forecast that Greater London would receive more economic-development spending than Scotland, Wales and Northern Ireland put together.

This has sat alongside policies aimed at making credit cheaper and easier, which have had the effect of making owners of homes and other assets better off. This month, Nigel Wilson, the chief executive of Legal and General, described the £375bn quantitative easing programme as ‘a policy designed by the rich for the rich’.”[A]

So what are the alternatives? There are any number of alternatives. Countries that retained and extended “Social Capitalism” during the Thatcherite era have been as good or better for ordinary people. Not so good for their Overclass. People don’t realise how badly they have been cheated. There is a nice on-line video showing this with simple diagrams, a presentation called 9 Out Of 10 Americans Are Completely Wrong About This Mind-Blowing Fact.[B] And people who are offended by inequality are also scared of state power and convinced that vast numbers of poor people are cheating on welfare. And they have been overawed by what right-wing economists call Economic Rationalism.

Most people take so-called Economic Rationalism much too seriously. It is actually a nonsensical system that assumes we ONLY act according to our selfish desires. In a real economy, real people almost always mix self-interest with notions of honesty, duty and sometimes generosity. These are sometimes called “irrational”, but there are no objective grounds for considering them superior to self-interest. It’s a habit that started in the European Enlightenment, but it rests on no deeper logic than that.

Adam Smith says that it is not from the benevolence of the butcher or baker that we expect to get our dinner. True, but we would expect them to be honest and avoid them if they were not. And most people would also wish to be honest with them. The fancy maths used by many economists fails to predict real-world economic events, because the basic assumptions are rubbish. There’s an apt saying among computer experts looking at computer models relevant to their own work: garbage in, garbage out.

Thatcher and Reagan sanctified the garbage viewpoint in the 1980s. But failed to improve the overall performance of the UK or USA, while leaving them vulnerable to a decline or collapse of the global financial system. This applies particularly to the UK, since the world could easily move to a radically different system of global trade. One in which goods are still exchanged, but the fancy finance that London lives off is no longer needed.

Classical capitalism wrecked itself in the 1930s with the Great Slump. Post war, the West was scared of both Global Communism and of a possible Fascist revival. So you had the Mixed Economy / Social Capitalism / Keynesianism: names are many. It was the militant left who pioneered the habit of calling it capitalism. The New Right’s contribution is to assert that capitalism is Freedom and that any attempt to impose new rules is slavery. But note that they ignore existing rules, which are deemed part of Freedom and definitely not slavery.

Societies always regulate the economic activity that occurs within the society. A small slow-changing society can manage with customary rules, which are familiar to everyone and so not counted as an interference with Freedom. But where the society is complex and fast-changing, community consensus will break down. Then it becomes necessary for the state to expand and impose more regulations, either directly or by some authorised body controlled by the people being regulated. Self-regulation is fine when it works, but often does not work. Where the society does not regulate, then the nastier and more aggressive patterns of behaviour win out in the short run. In the longer run, everyone suffers.

If Thatcher, Reagan and their successors were ever serious about restoring Classical Capitalism they soon learned better. They have however been too greedy in the USA. Bill Clinton balanced the budget. Bush Junior unbalanced it again, through a mix of wars and tax-cuts that mostly benefited the rich. Even the rich are likely to lose out in the long run. Gore Vidal in the 1950s spoke of the USA having socialism for corporations but not for ordinary citizens. This has never ceased to be the case: they were bailed out after the financial crisis they caused by speculation.

So how did we get here? The problem goes back to the 1970s. Which were not the disaster area the New Right now pretend, but the post-War consensus had broken down. Various things including Trade Union power meant that some sort of reform of the system was inevitable. Both Edward Heath and Harold Wilson tried to solve this by making the Trade Unions part of the ruling consensus. Wilson even offered Industrial Democracy with the Report of the committee of inquiry on industrial democracy (Bullock Report), which has almost been forgotten about.

The Hard Left vigorously opposed all such compromises, thinking this would lead to revolution. Instead it led to Thatcher. Who however did not really change the basics of the Corporatism that was introduced in the 1940s. She and her successors simply adjusted it to do more for the rich and less for the poor. Other European countries did opt for partnership, including the Scandinavian countries and West Germany (as it then was). This has been remained successful. Britain had no more economic growth in the Thatcherite 1980s than in the “disastrous” 1970s. Growth since then deteriorated slightly up until 2008. But the 1970s shared the burdens and Thatcher made sure that it was the poor who got most of the pain.

Note also that China’s success over the past few decades has been based on going from total state control to a version of Corporatism that gives the state a lot more authority than has ever been the case in Western Europe. A few of them contemplated going for Thatcher-style capitalism, but it has never happened. Given that we’ve been in slump since 2008, Thatcherism should be seen as a wrong turning following blunders by most of the Left.

Uncle Sam is Watching You

I’ve said for many years that the notion of the Internet as a liberation from state power was a fantasy. Anything electronic can be cracked by someone with enough skills, and the government intelligence agencies can train or hire the best skills. They can also “lean on” the big technological firms that make the essential hardware. Open-source software is available and may be more secure, but people forget that hardware can also be spying on you. Anyone who really wants to be secret should go back to old-fashioned methods, typewriters and paper. (There are reports the Russian government has done just that.)

It’s not now denied that data on everyone has been collected by spy agencies in the Anglosphere. It was not admitted until relevant documents leaked, but the undeniable has now been admitted. The defence is that only the guilty will be investigated. So who decides who’s suspicious enough to merit having their rights violated?

The Anglo tradition has been heavy on protection of privacy. The police have to get a warrant before they can violate anyone’s privacy. They have to convince a judge that there are reasonable grounds for suspicion. It would be possible to electronically collect data on everyone, but forbid access to it without oversight and a warrant from someone independent of the security services. But if the current system were that respectful of privacy, I assume we would have been told. And it would be inconvenient for the spooks. Not to mention the fun of knowing secrets way ahead of anyone else.

The main protest has been Classical-Liberal in form. Thus in Prospect, Chris Huhne writes:

“Freedom matters. The concept of liberty under the law was invented in Britain, instituted in the 1688 Glorious Revolution which finally curbed arbitrary monarchical power, and arguably reached its apogee in the protections afforded to American citizens in that admirable expression of advanced enlightenment thinking, the US constitution. Both the British and Americans, however, seem to have become horribly forgetful about the importance of their founding creeds and are at risk of losing the freedoms they no longer cherish.”[C]

I can’t agree with this. 1688 established an oligarchy presided over by a monarch. It took place two centuries before the vote was extended even to a majority of adult males living in the British isles. 1688 also confirmed that Roman Catholics were second-class citizens, which was not substantially ended until the Roman Catholic Relief Act of 1829. The concept of liberty under the law was not invented in Britain: it was widespread in Europe at the time and was a revival of Greek and Roman concepts. Nor is it unknown outside of Europe.

The 1688 rules were easily manipulated to allow massive suppression of anyone in Britain who expressed sympathy for Revolutionary France or the later Napoleonic Empire. Both of which were much closer to modern concepts of liberty than Britain at the time. The security services snooping on everyone rather than those reasonably suspected of crime is bad, but it is in no way a departure from British tradition as it actually was. Claiming otherwise does no one any good.

But Huhne does make one good point:

“We now know that 480,000 private contractors had access to the same level of information as Snowden, and neither GCHQ nor the NSA were aware that he had this information. How many other people have it, but are less public spirited and less motivated by the need for political safeguards? After all, Snowden has made off with some 58,000 pages of classified documents, downloaded from a desk in Hawaii. If the NSA and GCHQ cannot keep their own secrets, what conceivable guarantee can they give you or me to keep ours? What money will the rich and the powerful be prepared to offer poorly paid public servants for information that could embarrass and undermine their enemies?”

China: Xi Jinping Rules OK

“While the recent Third Plenary Session of the 18th Chinese Communist Party (CCP) Central Committee was expected to unveil major initiatives in economic liberalization, what has struck Chinese and foreign observers most is the weight that the leadership has given to enhancing state security, particularly centralizing powers in the top echelon of the party-state apparatus.”[D]

“Xi is set to take charge of a central security agency that will give him direct control of the police, including the armed paramilitary force, whose budget exceeds that of the armed forces. This steady accretion of power makes him the most formidable Chinese leader since Deng Xiaoping, who launched economic reform 35 years ago but put a straitjacket on political change.”[E]

This does seem to be the main point. Regional governments have enormous power. Foreign investors have found that though you need the Central Government to permit you to operate, only the lower-level authorities will enable you to create a successful enterprise. Which has broadly worked, but in some economic areas the various regions have separately gone for too large a share of a finite market, and created over-capacity. There is a need for more control. Market forces will be used, but as part of overall control. From the start of opening-up, Deng made sure that there was political control. And this has never ended.

Deng did keep population growth under control with the One-Child Policy. This is now being eased a little, with a second child allowed if one parent was an only child. This should balance any threat of having too few children. But there is going to be no free for all.

There will also be a limited reform of the “hukou” system, a system that limits migration by tying most social benefits to one particular place, not letting migrant workers acquire them in their new residence. It is harsh, but it does work within a fast-changing system. The point was recently raised on the on-line question and answer system Quora, with someone asking:

“Why is China not trying harder to abolish the hukou system? Other countries in Asia are just doing fine without such a rigid system of population control”.[F]

They were given a rather good answer:

“I disagree with the premise in the question details that ‘other countries in Asia are doing just fine’ without something like the hukou system in place. The only really comparable country in Asia would be India; possibly Indonesia, but in terms of total population, only India really compares. And the Chinese leadership, in not more radically abolishing the hukou system, is trying to prevent precisely what it is that isn’t ‘doing just fine’ for Indian cities: The huge, suppurating slums with their dire poverty, squalor, open sewers and horrific sanitation. This is something you simply don’t have in Chinese cities. Sure, you have slums and areas of relative squalor and poverty, but they’re nothing like what you’d find in other developing cities like Mumbai or Kolkata, or in Lagos, Nigeria.”

Though he was not directly elected and cannot be removed by direct popular choice, Xi does seem to be doing pretty much what most Chinese want. Certainly no worse than most leaders chosen via Representative Democracy, which has a way of failing to actually deliver individuals the things they thought they were voting for.

The Twilight of US Hegemony?

There’s an old nursery rhyme about an old woman who swallows a fly. And then swallows a spider to catch the fly, and a bird to catch the spider, a cat to catch the bird and so on. It ends with her dying while trying to swallow a horse. In the version I heard as a child, each verse ends with the question “I wonder why she swallowed the fly?” A mistake in the first place, and each attempt at a fix makes things worse.[G]

There’s a lot in common between this and US policy since the Soviet collapse. Having an outstanding problem with the Islamists whom they had raised up to fight the Soviet Union in Afghanistan, the US government preferred to ignore this. Instead they adopted a policy of quietly subverting Cold War allies whom they felt they no longer needed. Mobutu in what was then Zaire and is now the Congo, but it caused a major war. Yugoslavia, another avoidable war and with dangerous risks taken in the final detachment of Kosovo from Serbia.[H] Ceausescu in Romania and Suharto in Indonesia, both smooth enough from a US viewpoint. But trying to get rid of Saddam Hussein in Iraq was the start of a series of errors that are likely to prove fatal to US hegemony.

Saddam had unsuccessfully waged war against Iran between 1980 and 1988. This was done on behalf of Western interests, but ended with Iran coming close to victory and the West having to step in to prevent a possibly Iranian conquest that might have been seen as liberation by Iraq’s Shia majority. So Saddam’s Iraq survived, but was left with huge debts. That was the reason he invaded Kuwait in 1990. Saddam and Iraq were exactly the same thing in 1988 and 1990. A dictatorship based on Baathism, which had been inspired by European fascism. A regime that used torture and mass repression. A country which had regularly used poison gas against its Kurdish rebels. But in 1988, the West had seen Saddam as useful. By 1990 the Soviet Union had unexpectedly lost its grip on Eastern Europe and was in clear decline. Saddam was intended to fall as various other autocrats did fall. Invading Kuwait changed the name of the game and got him another 13 years in power, as well as an historic reputation that is likely to long outlast characters like Mobutu and Suharto.

Meantime the last solid Westernising elements in Afghanistan vanished with the fall of the Najibullah government in 1992. This could have been a much more effective ally for the USA than the gaggle of corrupt warlords who replaced him, and who were restored when the USA invaded after 9/11 and threw out the Taliban in 2001. Before the invasion, the Taliban had offered to punish al-Qaeda if the USA could prove their guilt using the Taliban version of Islamic law. This too would have been a much wiser move, the Taliban’s concern was local. The invasion of first Afghanistan and then Iraq widened the conflict and made it increasingly seen as the USA and its allies against Islam.

The Arab Spring began spontaneously, but the West took advantage of it and encouraged it on the basis of delusions. They thought it would be like Eastern Europe, or rather the region we should start calling Middle Europe again, since it is middling both geographically and socially. Those nation-states with long associations with Latin-Christian culture fitted quite easily into the expanded European Union. The Ukraine is pulled both ways and remains a mess. Russia itself found that it had been cheated and has strongly re-asserted its own identity under Putin. Tunisia was the best candidate for a successful transition to something like Western values. Even there, a moderate Islamist party emerged as the single biggest party and there have been many disputes, leading to the bringing-forward of a general election to December 2013.

In the rest of North Africa, the West ratted on the deal it had done with Libya – probably meaning that no other leader with an anti-Western past will bother to try any similar deal in future. In Egypt, pro-Western elements were encouraged to take a strong line against Mubarak rather than make a deal. There were then elections, in which it was shown that the pro-Western elements were about a tenth of the population, while rival Islamist parties got a clear majority. The Moderate Islamists tried ruling, and the West once again urged “no compromise”. This led on to the coup and something like the Mubarak regime restored.

Similar policies were followed in Syria, except that Syria never let the West subvert its military or became dependent on Western aid. But the pro-Western elements were encouraged to demand Assad’s removal rather than seek open elections, which Assad’s people might well have won. Intervening in Syria was maybe “swallowing the horse”. It was a small group of British Tories who first decided “enough is enough”, concluding that the West’s pet rebels in Syria were losing ground to Islamists who were much more effective as fighters. It was also unlikely that the government would have used gas at a time when they were winning, and highly likely that one or other faction of rebels staged it.

The same considerations looked likely to lead to a revolt in Congress against Obama’s wish to step into the Syrian civil war. So there was a sudden switch to the idea of compromise, which has gone as far as a deal on nuclear reprocessing with Iran. But in Syria, the war goes on.

Somalia and Kenya

Somalia has some curious similarities to Afghanistan. A left-wing regime overthrown by a gaggle of warlords, who then could make nothing coherent of it. And Political Islam developing as the only force with a prospect of re-uniting a shattered nation-state. The difference is that the intervention has been by African troops, with Kenya playing an increasing role. This was the context of the terrorist massacre at the Westgate shopping mall in Kenya – a place very much for the richest and most Westernised Kenyans.

“Somalia, one of the poorest and most conflict-riven countries in the world, is often cited as an example of what political scientists refer to as a ‘failed state.’ After the fall of longtime dictator Mohamed Siad Barre’s administration in January 1991, the country’s national government collapsed, and rival warlords and factions battled for supremacy. Al-Shabaab, a radical offshoot of the Islamic Courts Union – the pre-eminent Islamist faction in the country during the early part of the last decade – established itself in the mid-2000s and eventually became allied with al-Qaeda. Spurred by the 2006 Ethiopian incursion into Somalia to dislodge the Islamic Courts Union from the capital, Mogadishu, al-Shabaab rapidly gained support and expanded into new territory, wresting control over most of the southern part of the country.”

“But like the Islamic Courts Union, al-Shabaab is a loose confederation of Islamist warlords and not a highly centralized organization. Altogether it has approximately 5,000 dedicated fighters, as estimated by the United Nations Monitoring Group on Somalia and Eritrea. Recognizing a need to restore some stability to its neighbor, the Kenyan government hosted the internationally recognized Somali Transitional Federal Government, as well as European training facilities for Somali soldiers. After Ethiopia withdrew from Somalia in 2009, an African Union peacekeeping force stayed behind. This force, led by Ugandan troops, managed to provide some cover for the Transitional Federal Government to operate, but had to cede most of the south of the country to al-Shabaab.”

“In retaliation for the African Union establishing a mission within Somalia, al-Shabaab in 2010 staged a series of attacks in Kampala, Uganda, killing 74 people. Then in mid-2012, Kenyan forces (nominally under the auspices of the African Union) began an offensive against al-Shabaab in the south of Somalia. The Kenyans restored the rule of the recognized government in several areas, including the important port town of Kismayo, al-Shabaab’s primary economic center and political stronghold. Shabaab anger over its loss of territory and economic resources likely spurred the Westgate Mall attack…”

“Kenya’s deadliest terror attack, however, was the August 7, 1998, bombing of the American Embassy in Nairobi. Carried out by an al-Qaeda cell, the coordinated attack against the American embassies in Kenya and Dar es Salaam, Tanzania, killed a total of 234 people, 223 in Nairobi alone. Prior to the Kenyan intervention in Somalia, and with the exception of the 1998 embassy bombing, most high-level terror attacks within Kenya targeted Israelis or Israeli interests.”[I]

“The Somali government, although internationally recognised, is weak; its army is mostly a mixture of militias still loyal to quarrelling warlords. Africa’s leaders did not want another Afghanistan on their doorstep, so they moved in with Amisom – led by Uganda – seven years ago with a mandate and financial support from the United Nations.”

“The al-Shabaab militia, brought to world attention by its actions in Nairobi, is more than a radical Islamist group committing acts of terror. It is also by far the most powerful local army in Somalia. It controls more than half the country. ‘If Amisom left today,’ said a Somali journalist who asked not to be named for fear of reprisals, ‘al-Shabaab would take power in the capital Mogadishu tomorrow.’

“A clue to understanding al-Shabaab, and why it has such influence, is in its name. It means ‘The Youth’ in Arabic. Somalia is a nation of some 8 million and one of the poorest in the world. The vast majority of people here are under the age of 20. The Somali people have a proud history of nomadism, but drought and food shortages have forced millions off the land they once shared with their prized camels and endless skies. Somalia is now a part of the modern world, where jobs and income matter – and jihadists are recruiting. Mostly unemployed, poor and disenchanted by corrupt governments, Somali youths are relatively easy to manipulate. A story is told in the excellent study of Somalia by James Fergusson – The World’s Most Dangerous Place (Bantam Press) – of a group of schoolboys who were tempted into joining al-Shabaab by being given a piece of fruit every day.”[J]

Where it goes next is anyone’s guess.

Arab Spring – Winter Is Coming

The USA and Western Europe thought the Arab Spring would be like the “Velvet Revolutions” that happened in Warsaw Pact countries when it became clear that the Soviet Union was not going to intervene and stop it. The Velvet Revolutions delivered them a set of new allies and partners, replacing enemies. They thought they would get the same with the Arab Spring and so encouraged it. This was a half-arsed view, totally foolish. Exactly the opposite had happened in Iran in 1979. Their own attempts in Iraq have fragmented the society, with the largest fragment being Religious Shia Arabs, who currently control the central government and are in alliance with Iran.

The important point was that Leninism shared the same broad Progressive or Modernist outlook as the West. When faith in Leninism collapsed, most of them moved to the nearest equivalent. There was no substantial alternative in those countries. It is very different in the Islamic world, where Modernists held power on top of a society where completely different attitudes existed among the mass of the population. And also attracted many intellectuals, particularly when Leninism lost its attractions. It was shown that traditional societies could modernise themselves in a very un-Western manner.

Syria under Assad, though secular, was sympathetic to Iran. The West sponsored the initial protestors, and encouraged them to seek political dominance rather than a compromise. They refused to consider open elections with Assad still in power, because there was a real chance he would win it. The largest single element in Syria is Sunni Arabs, some of them intensely religious. Assad has mostly been supported by minorities, including one of the last surviving Christian communities in the Arab world. (There are few left in Iraq now, and the Copts in Egypt are also at risk thanks to Western “help”.) And Sunni Arabs with a secular outlook also tended to back Assad.

The dissident movement in its early days was able to pull in a variety of different people in the early days. But found that when the killing started, people retreated to their own communal niche. And that the religious fanatics were the most efficient fighters and became increasingly dominant. Both the West and the Syrian dissidents they sponsored manage to convince themselves that this was a staggeringly unexpected outcome. Even though something of the sort has happened many times before when a civil war starts.

There are two patterns for successful revolutions. Type One is where large parts of the existing government are carried over into the new order. These tend to be relatively mild in their methods and not particularly radical in their outcome. Sometimes there will be the violent crushing of a radical faction. But those who carry out the actual revolution then coexist in normal politics. They can make peace with those who defended the old regime, but are willing to accept the new order of things.

Examples of Type One are Britain’s “Glorious Revolution” of 1688, the American War of Independence, the Irish War of Independence and the 1830 revolution in France. Also the 1848 and 1870 revolutions in France, which both included the crushing of radicals, as did 1830 with the crushing of the 1832 revolt celebrated in Victor Hugo’s Les Miserables. And the replacement of the Kaiser by the Weimar Republic in Germany and the replacement of the Ottoman Empire by the Turkish Republic. You could also include Mussolini coming to power in Italy and Hitler in Germany, both of which were legal and took over the old machinery of state, but had the rhetoric of revolution. The Chinese Revolution of 1911-12 more or less counts, though it led quickly to breakdown of the state. Also the Kuomintang Northern Expedition of 1927, which the Chinese sometimes call the Great Revolution, but not much changed. Nasser’s coming to power in Egypt also fits the pattern.

Type Two is where the state is substantially overthrown. These are highly radical, mostly include the death, exile or imprisonment of some of the original revolutionary leadership and mass repression of the defeated forces, usually including ultra-radicals. A period of extreme radicalism is also normal, mostly with a partial retreat afterwards. Sometimes the complete overthrow of the revolution. Examples of Type Two are the formation of the Commonwealth after the English Civil War, the French Revolution of 1789, the October Revolution in Russia, the Chinese Revolution of 1949 and the Iranian Revolution of 1979.

(Note that I exclude from Type One those revolutions that were the prelude to a Type Two, including the early stages of the English Civil War and the French Revolution of 1789, and also the February Revolution in Russia.)

Now apply this pattern to the Arab Spring. The net results of the West’s efforts have been to give power to the Islamists, which is not at all what they wanted. And it may lead on to worse. The Islamists see the recovery of Islamic holy places as an obligation. They are not so scared of Israel’s presumed nuclear arsenal, because they see mortal life as just a testing ground for an immortal future.